The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Sarasota Corp. at December 31, 2022.

Common Stock ($2 stated value) $2,400,000

Paid-in Capital in Excess of Par Value-Preferred Stock 67,500

Paid-in Capital in Excess of Stated Value-Common Stock 1,575,000

Preferred Stock (5%, $100 par, noncumulative) 900,000

Retained Earnings 2,001,000

Treasury Stock (18,000 common shares) 108,000

Prepare the stockholders' equity section of the balance sheet at December 31, 2022.

Answer and Explanation:

The preparation of the stockholder equity section of the balance sheet is presented below:

Stockholders' equity

Paid in capital

Capital stock

5% preferred stock, $100 par value, noncumulative, 9,000 shares are issued and outstanding $900,000

Common stock, no par, $2 stated value, $2,400,000

Total capital stock $3,300,000 (A)

Additional paid in capital

Paid-in Capital in Excess of Par Value $67,500

Paid-in Capital in Excess of Stated Value - Common Stock $1,575,000

Total additional paid in capital $1,642,500 (B)

Total paid in capital $4,942,500 (A + B)

Add: Retained earnings $ 2,001,000

Total paid in capital and retained earnings $6,943,000

Less: Treasury stock (18,000 common shares) $ (108,000)

Total stockholders' equity $6,835,500